§ 380. Power to make loans. 1. A savings and loan association may make
a loan upon the security of a mortgage of the type authorized to be made
by a savings bank by subdivisions five-a and six of section two hundred
thirty-five of this chapter, subject to such regulations as the
superintendent of financial services may prescribe.

1-b. A savings and loan association may also lend its funds to
borrowers therefrom upon their promissory notes payable to the
association which are:

(a) secured by one or more mortgages in which a savings and loan
association may invest; provided however, that the amount loaned is not
in excess of ninety per centum of the principal sum secured by such
mortgage or mortgages. The assignment of every mortgage taken as
security for any such note shall be recorded or registered in the office
of the proper recording officer of the county in which the real property
described in such mortgage is located, unless such mortgage or mortgages
have been so assigned by a savings and loan association;

(b) secured by any of the stocks and bonds in which a savings and loan
association may invest, except stocks eligible for investment pursuant
to the provisions of subdivision twenty-six of section two hundred
thirty-five of this chapter; provided however, that the amount of the
loan is not in excess of ninety per centum of the market value of such
stocks and bonds;

(c) made by a savings bank which has been incorporated three years or
more.

(d) secured by any of the stocks eligible for investment by a savings
and loan association pursuant to the provisions of subdivision
twenty-six of section two hundred thirty-five of this chapter; provided
however, that (1) the amount of the loan is not in excess of the lesser
of (i) eighty-five per centum of the market value of such stocks, or
(ii) the maximum loan value of such stocks determined in accordance with
Federal Reserve Regulation U and the supplement thereto of the board of
governors of the federal reserve system and as if the savings and loan
association were a member bank of such system extending credit secured
by such stocks for their purchase as margin stock, and (2) the amount of
such loan, together with the aggregate amount outstanding of all loans
made pursuant to this paragraph and the aggregate amount of investments
in stock eligible for investment by a savings and loan association
pursuant to the provisions of subdivision twenty-six of section two
hundred thirty-five of this chapter, shall not exceed the aggregate
limitations set forth in subdivision twenty-six of section two hundred
thirty-five of this chapter;

2. A savings and loan association may lend its funds to its members
upon their notes as follows: (a) secured by the transfer and pledge to
the association of shares of any savings and loan association or by the
assignment to the association of a time deposit in any savings and loan
association, the withdrawal value of which, in either case, shall not be
less than the amount of any such loan.

(b) Representing loans and advances of credit for the purpose of
financing alterations, repairs and improvements upon or in connection
with, or as the superintendent may authorize the equipping of existing
structures, and the building of new structures, upon urban, suburban, or
rural real property (including the restoration, rehabilitation,
rebuilding, and replacement of such improvements which have been damaged
or destroyed by earthquake, conflagration, tornado, hurricane, cyclone,
flood, or other catastrophe), by the owners thereof or by lessees of
such real property under a lease expiring not less than six months after
the maturity of the loan or advance of credit or by lessees under
proprietary leases from a corporation or partnership formed for the
purpose of the cooperative ownership of real estate, provided: (1) the
amount of such loan, advance of credit, or purchase made for the purpose
of financing the alteration, repair, equipping or improvement of
existing structure or the building of new structure does not exceed
twenty thousand dollars; (2) the maturity thereof does not exceed one
hundred twenty-one months; (3) the rate which may be paid by the
borrower for interest, discount, and fees of all kinds in connection
with the transaction shall be the rate or rates agreed to by the savings
and loan association and the borrower; and (4) the loan shall be paid in
equal or substantially equal monthly installments calculated from the
date of the note; provided, however, that in addition thereto, the
savings and loan association may contract to charge the borrower: (i)
the fees payable to the appropriate public officer to perfect any lien
or other security interest taken to secure the loan or the premium, not
in excess of such filing fee, payable for any insurance in lieu of such
filing; (ii) in case of default, and in accordance with the provisions
of the instrument evidencing the obligation, either a fine in an amount
not to exceed five cents per dollar on any installment which has become
due and remained unpaid for a period in excess of ten days, but no such
fine shall exceed five dollars and only one fine shall be collected on
any such installment regardless of the period during which it remains in
default, and provided further that should the aggregate of such fines
collected in connection with any loan exceed two per centum of such
loan, or in any event twenty-five dollars, the savings and loan
association shall refund such excess to the borrower within sixty days
after the loan is paid in full, or, subject to an allowance of unearned
interest attributable to the amount in default, interest on each amount
past due at a rate not in excess of the rate provided for in the
instrument evidencing the obligation; (iii) the actual expenditures,
including reasonable attorney's fees, for necessary court process; and
(iv) in case the savings and loan association insures a borrower under a
credit unemployment insurance policy, group life insurance policy, group
health insurance policy, group accident insurance policy, or group
health and accident insurance policy, or requires insurance on personal
property securing any such loan, an amount not in excess of the premiums
chargeable in accordance with rate schedules then in effect and on file
with the superintendent of financial services for such insurance by the
insurer. No savings and loan association shall require a borrower to
purchase shares in the association, or to purchase shares in lieu of
regular periodic installment payments, or to do or refrain from any
other act which would entail additional expense or sacrifice, as a
condition precedent to granting a loan or advance of credit under the
authority of this paragraph. Notwithstanding the provisions of this
paragraph no refund of excess fines shall be required if it amounts to
less than one dollar.

(c) Representing loans and advances of credit for the purpose of
defraying the cost of attendance of one or more students the income of
whose family is fifteen thousand dollars or more per year at the time
the loan or loan commitment is made at a university or college or for
the purpose of defraying the cost of attendance of one or more students
at an elementary or secondary school providing education required for
minors; provided, however, that no such loan shall bring the total
unpaid principal balances of any one or more loans made by such savings
and loan association to the borrower pursuant to this paragraph to an
amount in excess of thirty thousand dollars; and further provided that
the maturity of any such loan does not exceed eighty-five months; and
further provided that the rate which may be paid by the borrower for
interest, discount, and fees of all kinds in connection with the
transaction shall be the rate or rates agreed to by the savings and loan
association and the borrower, reckoned on each loan or advance from the
date thereof, calculated on any of the following bases: (i) on the
unpaid principal amount of such loans and advances from time to time
outstanding, or (ii) for each month on an average balance outstanding
determined by dividing by two the sum of the balances of unpaid
principal of such loans and advances outstanding on two dates during
such month, as specified in such agreement; the first of which dates
being not later than the fifteenth day of such month and the second
being not earlier than the sixteenth day of such month and not less than
ten nor more than twenty days after the first day, or (iii) for each
month on a fixed amount selected from a schedule, which fixed amount may
exceed the average daily balance under (i) above, or the average balance
if determined under (ii) above, by a differential of not more than five
dollars, provided the same fixed amount is also used for computing
interest for any month for which such balance exceeds said fixed amount
by any amount up to at least the same differential; and further provided
that the loan shall be paid in equal or substantially equal monthly
installments calculated from the date of the note. No fee, commission,
expense, or other charge whatsoever shall be taken, received, reserved
or contracted for in addition to the rate of interest authorized by this
paragraph except (i) the fees payable to the appropriate public officer
to perfect any lien or other security interest taken to secure the loan
or the premium, not in excess of such filing fee, payable for any
insurance in lieu of such filing; (ii) in case of default, and in
accordance with the provisions of the instrument evidencing the
obligation, either a fine in an amount not to exceed five cents per
dollar on any installment which has become due and remained unpaid for a
period in excess of ten days, but no such fine shall exceed five dollars
and only one fine shall be collected on any such installment regardless
of the period during which it remains in default, and provided further
that should the aggregate of such fines collected in connection with any
loan exceed two per centum of such loan, or in any event twenty-five
dollars, the savings and loan association shall refund such excess to
the borrower within sixty days after the loan is paid in full, or,
subject to an allowance of unearned interest attributable to the amount
in default, interest on each amount past due at a rate not in excess of
the rate provided for in the instrument evidencing the obligation; (iii)
the actual expenditures, including reasonable attorney's fees, for
necessary court process; and (iv) in case the savings and loan
association insures a borrower under a credit unemployment insurance
policy, group life insurance policy, group health insurance policy,
group accident insurance policy, or group health and accident insurance
policy, or requires insurance on personal property securing any such
loan, an amount not in excess of the premiums chargeable in accordance
with rate schedules then in effect and on file with the superintendent
of financial services for such insurance by the insurer. No savings and
loan association shall require a borrower to place any sum on deposit,
or to make deposits in lieu of regular periodic installment payments, or
to do or refrain from doing any other act which would entail additional
expense or sacrifice, as a condition precedent to granting a loan or
advance of credit under the authority of this paragraph, except under
such terms and conditions as the superintendent may from time to time
approve. Notwithstanding the provisions of this paragraph no refund of
excess fines shall be required if it amounts to less than one dollar.

(d) Representing loans secured by mobile home chattel paper evidencing
a monetary obligation incurred to finance the purchase of a mobile home
located at the time of such purchase, or to be located within ninety
days, at a semipermanent site within the state or in a contiguous state
and to be maintained as a residence of the borrower, the borrower's
spouse, child, grandchild, parent or grandparent.

(1) For this paragraph:

(i) "mobile home chattel paper" means written evidence of both a
monetary obligation and a security interest of first priority in a
mobile home and any equipment installed, or to be installed therein, and

(ii) "mobile home" or "manufactured home" means a structure,
transportable in one or more sections, which in the traveling mode, is
eight body feet or more in width or forty body feet or more in length,
or when erected on site, is three hundred twenty or more square feet,
and which is built on a permanent chassis and designed to be used as a
dwelling with or without a permanent foundation when connected to
required utilities, and includes the plumbing, heating, air-conditioning
and electrical systems contained therein.

(2) If the loan is for the purpose of financing the purchase of a new
mobile home,

(i) it shall mature not later than two hundred forty months after the
date thereof, and

(ii) the amount advanced to the borrower shall not exceed one hundred
per cent of the sum of (a) the purchase price of such mobile home
(including any installed equipment) plus (b) the price of any new
equipment installed or to be installed by the dealer.

(3) If the loan is for the purpose of financing the purchase of a used
mobile home,

(i) it shall mature not later than two hundred forty months after the
date thereof, and

(ii) the amount advanced to the borrower shall not exceed one hundred
per cent of the purchase price of the mobile home actually paid
(including any installed equipment).

(4) The loan shall be payable in equal or substantially equal monthly
installments calculated from the date of the loan. Interest, which may
be taken in advance, may be charged thereon, computed from the date of
the loan to the date of the last installment payable thereunder, if the
loan has a maturity, (i) not exceeding thirty-seven months, at a rate
not to exceed six dollars per annum discount per one hundred dollars of
the face amount or ten dollars if the interest so computed is less than
that amount, or (ii) exceeding thirty-seven months, at a rate not to
exceed five dollars per annum discount per one hundred dollars of the
face amount provided that the interest charged, if the amount thereof
exceeds ten dollars, shall not exceed one per cent per month on the
unpaid principal balance.

(5) The authorized interest shall be inclusive of all charges incident
to investigating and making any loan. No fee, commission, expense, or
other charge shall be permitted except that the savings and loan
association may contract to charge the borrower (i) the fees payable to
a public officer to perfect any lien or other security interest taken to
secure the loan, or the premium, not in excess of such filing fee,
payable for any insurance in lieu of such filing; (ii) in case of
default, and in accordance with the instrument evidencing the
obligation, either a fine in an amount not to exceed five per cent on
any installment which has become due and remained unpaid for a period in
excess of ten days, but no such fine shall exceed five dollars and only
one fine shall be collected on any such installment regardless of the
duration of the default, and provided further that should the aggregate
of such fines collected in connection with any loan exceed two per cent
of such loan or twenty-five dollars, the savings and loan association
shall refund such excess within sixty days after the loan is paid in
full, or, subject to an allowance of unearned interest attributable to
the amount in default, interest on each amount past due at a rate not in
excess of one per cent per month during the delinquency; (iii) the
actual expenditures, including reasonable attorney's fees for necessary
court process, and (iv) in case the savings and loan association insures
a borrower under a credit unemployment insurance policy, group life
insurance, health insurance, accident insurance, or health and accident
insurance policy, or requires insurance on the property securing such
loan, an amount not in excess of the premiums lawfully chargeable. No
savings and loan association shall require a borrower to purchase shares
in the association, or to purchase shares in lieu of regular periodic
installment payments, or to do or refrain from doing any other act which
would entail additional expense or sacrifice, as a condition to granting
a loan under this paragraph except as the superintendent may from time
to time approve. No refund of excess fines need be made if it amounts to
less than one dollar.

(6) As a condition of any loan made pursuant to this paragraph, the
borrower shall certify that the mobile home, against which the loan is
made, is intended to be maintained in the state or in a contiguous state
as a residence of the borrower, the borrower's spouse, child,
grandchild, parent or grandparent. If the mobile home shall not be so
maintained on the ninetieth day next succeeding the date of the loan or
if it is relocated so as to no longer be located in the state or a
contiguous state at any time before the first anniversary of the loan,
the loan and all authorized charges shall become immediately due and
payable subject only to the refund provisions of paragraph (d) and the
borrower may, if the contract so provides, be required to pay, as an
additional authorized charge, a penalty in an amount not to exceed two
per cent of the face amount of the loan.

(7) No loan shall be made by a savings and loan association pursuant
hereto if the total amount loaned by it pursuant to this paragraph
exceeds, or by the making of such loan will exceed, an amount equal to
five per cent of the assets of the savings and loan association.

(8) Subject to such limitations and conditions as the superintendent
of financial services may prescribe by general regulation, a savings and
loan association may make a loan pursuant to this paragraph which the
federal housing administrator has insured or has made a commitment to
insure and may receive and hold such debentures as are issued by the
federal housing administrator in payment of such insurance, or which is
guaranteed pursuant to the provisions of the act of congress entitled
the "Servicemen's Readjustment Act of l944." No law of this state
prescribing or limiting the interest rate upon loans or advances of
credit or prescribing a penalty for violation thereof or prescribing the
nature, amount or form of security or requiring security upon which
loans or advances of credit may be made or prescribing or limiting the
period for which loans or advances of credit may be made or limiting the
amount of any class of loans, advances of credit or purchases which may
be made shall be deemed to apply to loans, advances of credit or
purchases made or to loans acquired by purchase pursuant to this
subparagraph.

(e) A borrower may prepay any loan made pursuant to paragraph (b), (c)
or (d) in full or, with the consent of the savings and loan association,
may refinance the loan. In the event of such prepayment or refinancing,
the savings and loan association shall refund: (1) the unearned portion
of the interest to the borrower the amount of which portion shall be
determined according to a generally accepted actuarial method; provided,
however, that if the amount of interest previously deducted (i) was less
than ten dollars, no refund shall be required; or (ii) exceeded the sum
of ten dollars and the earned interest is less than that amount, the
savings and loan association may retain such an additional amount as
will bring the earned interest to the sum of ten dollars and refund the
remainder, and provided further, that unless the loan is refinanced, no
refund shall be required if it amounts to less than one dollar; and (2)
if a charge was made to the borrower for premiums for insuring the
borrower under a credit unemployment insurance policy, group life
insurance policy, or under a group health, group accident or group
health and accident insurance policy, the excess of the charge to the
borrower therefor over the premiums paid or payable by the savings and
loan association, if such premiums were paid or payable by the savings
and loan association periodically, or the refund for such insurance
premium received or receivable by the savings and loan association, if
such premium was paid or payable in a lump sum by the savings and loan
association, provided that no such refund shall be required if it
amounts to less than one dollar. In the event (i) the maturity of the
loan is accelerated due to the default of the borrower or otherwise and
judgment is obtained, or (ii) repayment is made pursuant to any such
insurance policy, the borrower or his legal representative, as the case
may be, shall be entitled to the same refund as if the loan had been
prepaid in full on the date of acceleration or repayment.

2-a. A savings and loan association may lend its funds to borrowers
therefrom upon their promissory notes representing loans for the purpose
of financing the purchase of or refinancing an existing ownership
interest in certificates of stock or other evidence of an ownership
interest in, and a proprietary lease from, a corporation or partnership
formed for the purpose of the cooperative ownership of real estate as
provided in this subdivision.

A savings and loan association may, subject to such regulations as the
superintendent of financial services finds necessary and proper, invest
to an amount not exceeding the maximum per cent of the loans permitted
to be made on real estate improved by a single family residence occupied
by the owner, provided that for purposes of this section the amount of
the purchase price shall be deemed to equal the appraised value of such
certificate of stock or other evidence of an ownership interest, or, in
the case of a refinancing, the appraised value of certificates of stock
or other evidence of the ownership of an interest in, and a proprietary
lease from, a corporation or partnership formed for the purpose of the
cooperative ownership of real estate, for the purpose of financing a
purchase of or refinancing an existing ownership interest in such a
corporation or partnership; provided (a) such investment is secured
within ninety days from the making of the loan by an assignment or
transfer of the stock or other evidence of an ownership interest of the
borrower and a proprietary lease; and (b) repayments of principal and
interest shall be effected within the same number of years as a
conventional mortgage loan previously described in this subdivision. The
maximum rate of interest which may be charged, taken or received upon
any loan or forbearance made pursuant to this subdivision may exceed the
rate of interest prescribed by the superintendent of financial services
in accordance with section fourteen-a of this chapter by no more than
one and one-half per cent per annum.

3. A savings and loan association may also lend its funds, if at any
time such association has funds in excess of the amount needed for loans
to its members, as follows:

(a) To other savings and loan associations.

(b) Upon bonds and mortgages and notes and mortgages upon real estate
to the same extent authorized in subdivision one of this section,
subject to the limitations therein.

3-a. A savings and loan association may also lend its funds to its
members or their children who are attending or planning to attend
colleges in this state or elsewhere, to assist them in meeting their
expenses of higher education, where such loans are made by the
association and (1) guaranteed by the New York higher education
assistance corporation in accordance with the provisions of article
fourteen of the education law, or (2) insured or covered by a commitment
to insure or are guaranteed or covered by a commitment to guarantee
issued by the federal education commissioner in accordance with the
provisions of the act of congress entitled the "Higher Education Act of
1965". In such cases no further security for the repayment of such loans
shall be required of the borrowers by the association. A savings and
loan association may also lend its funds to nonmembers, for the same
purposes and upon the same terms and conditions if, at any time, such
association has funds in excess of the amount needed for loans to its
members.

4. No loan shall be made under the provisions of this section upon the
security of a mortgage:

(a) Which is not a first lien upon the property described therein,
unless all prior mortgages, liens or encumbrances thereon are owned by
such association; and no such prior mortgage, lien or encumbrance shall
be sold, transferred or assigned by such association until every
subsequent mortgage, lien or encumbrance owned by it shall have been
fully paid and satisfied; and further provided that whenever loans are
made under both subdivisions one and three of this section upon the same
real estate the limitations of amount applicable to the loan under each
subdivision shall be determined by first segregating that portion of the
appraised value of the premises necessary to sustain the prior mortgage,
lien or encumbrance, and the limitation of amount applicable to the
additional mortgage, lien or encumbrance shall then be determined with
reference only to the remaining portion of the appraised value; provided
further that the loan under subdivision three shall provide for equal or
substantially equal periodic payments of interest and principal at least
annually in amount sufficient to pay all interest and effect full
repayment of principal within thirty years;

(b) Except upon the written and signed certificate of an appraiser
appointed pursuant to policies established by the board of directors,
certifying to the value of the premises according to such appraiser's
judgment. Such certificate shall be filed and preserved among the
records of the association and any member shall have access thereto;

4-a. A savings and loan association may, in addition to the authority
granted under any other subdivision of this section or subdivision six
of section three hundred seventy-nine of this article, make a loan to a
natural person upon the security of a mortgage which is not a first lien
at the rate or rates agreed to by the savings and loan association and
the borrower, subject to such regulations as the superintendent of
financial services may prescribe. Such regulations by the superintendent
of financial services may include such restrictions as the
superintendent of financial services finds necessary or proper,
including without limitation, a restriction as to the percentage of
total assets which may be invested in such loans or a restriction on the
loan to appraisal value of property securing such loan.

For purposes of this subdivision, the term mortgage shall include a
lien on an existing ownership interest in certificates of stock or other
evidence of an ownership interest in, and a proprietary lease from, a
corporation or partnership formed for the purpose of the cooperative
ownership of real estate.

5. Every mortgage and every assignment of a mortgage taken by any
savings and loan association shall be immediately recorded or registered
in the office of the proper recording officer of the county in which the
real estate described in such mortgage is located. This subdivision
shall not apply to a participating interest in any mortgage which shall
have been acquired by a savings and loan association under the
provisions of section three hundred eighty-c of the banking law if the
originating mortgagee shall have recorded such mortgage or an assignment
thereof in the office of the proper recording officer of the county in
which the real estate described in such mortgage is located.

6. Any savings and loan association may require either single premium
reducing term, monthly premium reducing term, or fully paid-up life
insurance or accident, health or disability insurance to be assigned to
it by any borrower. When directed by the written order of a borrower,
the cost of such insurance may be advanced and paid by the association.
All such payments may be added to the unpaid balance of the loan.

7. A savings and loan association shall have the power to waive its
right to enforce payment of a bond or note secured by a mortgage on real
property and may waive its right to obtain a deficiency judgment against
the borrower in the event of foreclosure of such mortgage.